Author
Kent Hickman
Other affiliations: Fort Lewis College, Eastern Washington University, Hanken School of Economics ...read more
Bio: Kent Hickman is an academic researcher from Gonzaga University. The author has contributed to research in topics: Capital budgeting & Corporate finance. The author has an hindex of 9, co-authored 17 publications receiving 2036 citations. Previous affiliations of Kent Hickman include Fort Lewis College & Eastern Washington University.
Papers
More filters
TL;DR: In this article, the authors categorize outside directors as either independent of or having some affiliation with managers, and find that bidding firms on which independent outside directors hold at least 50% of the seats have significantly higher announcement-date abnormal returns than other bidders.
1,694 citations
TL;DR: The Price Is Right game show as mentioned in this paper offers a unique laboratory for observing decision making behavior because rewards are much higher than those encountered in a typical economics experiment and because of the substantial opportunity which contestants have for formulating their strategies.
Abstract: The television game show ‘The Price Is Right’ offers a unique laboratory for observing decision making behavior because rewards are much higher than those encountered in a typical economics experiment and because of the substantial opportunity which contestants have for formulating their strategies. Analysis of contestant behavior substantiates (1) the persistence of decision making errors despite the penalties associated with such errors, and despite the existence of simple strategy which outperforms contestants' behavior and (2) that learning drives competitors toward more effective behavior.
64 citations
TL;DR: The authors examined the relative performance of bills, bonds, and stocks over various holding periods and found that the risk of underperformance for a strategy of investing in higher risk classes of investments is minimal over long holding periods.
Abstract: This article examines the relative performance of bills, bonds, and stocks over various holding periods. Using a resampling technique that accounts for the cross–sectional correlation between security classes, the authors find that the risk of underperformance for a strategy of investing in higher risk classes of investments is minimal over long holding periods, while the rewards are substantial.
48 citations
TL;DR: Two approaches are commonly adopted as benchmarks in determining value: Market Comparable Formula (MCF) and Dividend Discount (DD) as mentioned in this paper, which are commonly referred to as market comparable formulas.
Abstract: m Valuation of privately held stock is one of the most important issues in corporate finance because the majority of businesses are small and privately owned. Valuation is critical in estate and divorce settlements, disputes with the IRS, acquisitions and mergers, loans, partnership buyouts, and ESOPs. It is also of major concern to the finance professor who teaches corporate finance and investments, as well as to investment bankers, lawyers, expert witnesses, judges, and juries. By perusing recent periodical indices, one can find many articles addressing the issue of valuation. The majority of articles are descriptive in nature, summarizing different approaches to valuation, giving their strengths and weaknesses, or reviewing recent court decisions (e.g., Blum [7], Longenecker [20], and Weiss [29]). Two approaches are commonly adopted as benchmarks in determining value. These techniques shall be referred to as Market Comparable Formula (MCF) and Dividend Discount (DD). The popularity of MCF may be traced to landmark legal decisions such as Central Trust [2] and Bader [1]. In both cases, a value was derived based on a weighted average of the capitalized value of dividends, earnings, and book value, and then reduced for lack of marketability. The DD value, on the other hand, depends on the forecasted future cash flows of an asset (dividends for stocks), discounted at a risk-adjusted rate.
29 citations
Cited by
More filters
TL;DR: In this paper, the authors present evidence consistent with theories that small boards of directors are more effective, using Tobin's Q as an approximation of market valuation, and find an inverse association between board size and firm value in a sample of 452 large U.S. industrial corporations.
6,611 citations
TL;DR: This article found that measures of board and ownership structure explain a significant amount of cross-sectional variation in CEO compensation, after controlling for standard economic determinants of pay, and that CEOs earn greater compensation when governance structures are less effective.
3,451 citations
TL;DR: In this paper, the authors examined whether audit committee and board characteristics are related to earnings management by the firm and found a negative relation between audit committee independence and abnormal accruals.
3,298 citations
Posted Content•
TL;DR: This article surveys the economic literature on boards of directors and finds that board composition is not related to corporate performance, while board size has a negative relation with corporate performance and boards appear to evolve over time as a function of the bargaining power of the CEO relative to the existing directors.
Abstract: This paper surveys the economic literature on boards of directors. Although a legal requirement for many organizations, boards are also an endogenously determined governance mechanism for addressing agency problems inherent to many organizations. Formal theory on boards of directors has been quite limited to this point. Most empirical work on boards has been aimed at answering one of three questions: 1) How are board characteristics such as composition or size related to profitability? 2) How do board characteristics affect the observable actions of the board? 3) What factors affect the makeup of boards and how they evolve over time? The primary findings from the empirical literature on boards are: Board composition is not related to corporate performance, while board size has a negative relation to corporate performance. Both board composition and size are correlated with the board's decisions regarding CEO replacement, acquisitions, poison pills, and executive compensation. Finally, boards appear to evolve over time as a function of the bargaining power of the CEO relative to the existing directors. Firm performance, CEO turnover, and changes in ownership structure appear to be important factors affecting changes to boards.
2,804 citations
TL;DR: In this paper, the authors measure difference in firm performance caused by broad composition and ownership structure and control for a number of otheк variables that are likely to be correlated with corporate performance.
Abstract: This paper attempts to measure difference in firm performance caused by broad composition and ownership structure. These two variables are intended to measure the direct incentives and monitoring faced by top management. We also control for a number of otheк variables that are likely to be correlated with corporate performance. We do so to improve the precision of our estimates, as well as to eliminate much of the omitted-variable bias that has undoubtedly affected previous studies of board composition.
2,494 citations